- Ethereum eclipsed BTC in recent ETF inflows, a healthy signal for the altcoin market.
- BTC dominance eased slightly by 1%, but a further drop could boost the altcoin sector.
Ethereum [ETH] has outperformed Bitcoin [BTC] in ETF flows, raising hopes of a relief rally for the altcoin sector.
In fact, Tracy Jin, COO of MEXC exchange, told AMBCrypto that the ETF divergence was capital rotation that could lift ETH and top altcoin gems.
In an email statement, she said,
“The sharp contrast in ETF flows is one of the most telling signs of the beginning of capital rotation on the market.”
She added,
“Ethereum’s ETFs have recorded 11 consecutive days of inflows totaling over $630 million against the choppy macroeconomic and geopolitical tension backdrop, whilst Bitcoin ETFs have seen three straight days of outflows bleeding over $1.2 billion.”
BTC ETFs broke their inflows streak last week and rebounded on Tuesday. But ETH still led earlier this week with an overall $187M inflow.
Source: Soso Value
Will altcoins outshine BTC?
According to Jin, the ETH outperformance triggered a slight relief bounce on some select altcoins like Monero [XMR], Ethena [ENA], Hyperliquid [HYPE] and Arbitrum [ARB].
“Other coins like XMR, ENA, HYPE, AAVE, and ARB are following ETH, posting more than 5% gains in contrast to BTC’s muted 0.6% gain during Tuesday’s recovery rally.”
The positive outlook was supported by the wavering Bitcoin [BTC] dominance. In the past two weeks, BTC dominance has fluctuated around 63% and dropped 1% in June.
Source: TradingView (Bitcoin dominance)
But the broader sector could witness if the BTC dominance declines further. Notably, a 5% BTC dominance drop in early May triggered an over 300% upswing for HYPE and other select tokens.
However, not all altcoins will perform equally well in case a new phase of altcoin season hits the market.
From a sector performance perspective, the top gainers in the past 30 days of trading were DeFi (28%), memecoins (22%) and L1 (10%). Most of the L2 tokens came in last based on segment performance.
Source: Velo
If the trend holds during the expected altcoin pump, it would be better to have an altcoin portfolio that features leaders in the top-performing categories.
Overall, a broader altcoin season has remained elusive in 2025 despite pockets of outperformance amongst select tokens. But key indicators suggested the sector may be ripe for lift-off, Jin added.
“Altseason may not be in full effect just yet, but the conditions are aligning. The early groundwork for altseason is currently being laid, and this time, institutional capital is coming along for the ride.”
